/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/151012.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Monday, October 12, 2015, Vol. 18, No. 201 Headlines A U S T R A L I A AUSTRALIA: ATO Hits Record in Winding-up Applications BOAC PTY: First Creditors' Meeting Set For October 19 CHEM SPEC: First Creditors' Meeting Set For October 19 FITGENES GROUP: Collapsed Into Voluntary Administration ICE TV: Forced Into Administration NAT CARPENTRY: In Liquidation; 1st Creditors' Meeting Set Oct. 16 VIRGIN AUSTRALIA: Fitch Raises Rating on Class D Notes to 'B+' WIRRANOOK HOLDINGS: First Creditors' Meeting Set For October 19 C H I N A CHINA: Gas Operators to See Healthy Customer Connection Growth SKYPEOPLE FRUIT: Receives Nasdaq Listing Non-Compliance Notice * Sharp China Slowdown is Top Global Ratings Risk, Fitch Says I N D I A CHEEMA SPINTEX: ICRA Reaffirms D Rating on INR48.70cr Loan HILLSFOOD AGRO: CARE Assigns 'B' Rating to INR10.50cr LT Loan J. J. CONSTRUCTIONS: ICRA Suspends B Rating on INR15cr Loan JAIPRAKASH POWER: CARE Lowers Rating on INR11,885cr Loan to 'D' JEWEL STAR: CARE Revises Rating on INR35cr LT Loan to BB- KIRAN BAWA: CARE Assigns 'B+' Rating to INR5cr LT Loan LOKESH MACHINES: CARE Reaffirms B- Rating on INR93.14cr LT Loan MBM ENGINEERING: ICRA Reaffirms 'B+' Rating on INR9.25cr Loan MSM STEELS: CARE Reaffirms B+ Rating on INR65.50cr LT Loan NAVJIVAN COTTON: ICRA Reaffirms 'B' Rating on INR11.75cr Loan NIKKA MAL: CARE Reaffirms B+ Rating on INR11cr LT Loan ORIGIN LIFECARE: CARE Assigns B+ Rating to INR7cr LT Loan ORIGIN MINERALS: CARE Assigns B+ Rating to INR5cr LT Loan PANCHAMI ELECTRONICS: CARE Assigns B+ Rating to INR5.60cr LT Loan PANYAM CEMENTS: CARE Upgrades Rating on INR56.24cr Loan to 'C' PARTHAS: CARE Revises Rating on INR14.16cr LT Loan to B+ PONDICHERRY TINDIVANAMTOLLWAY: CARE Reaffirms B LT Loan Rating REAL GROW: CARE Reaffirms B+ Rating on INR29.80cr LT Loan RP RESORTS: ICRA Assigns 'D' Rating to INR10cr Long Term Loan SAFE DEVELOPMENT: ICRA Assigns D Rating to INR26.10cr LT Loan SONATA CERAMICA: CARE Ups Rating on INR5.20cr LT Loan to BB- SPINTEX INDIA: ICRA Assigns 'B' Rating to INR15cr Term Loan SREE DRG: CARE Assigns 'B' Rating to INR7.23cr LT Loan SRI MOULI: Ind-Ra Assigns B+ LT Issuer Rating; Outlook Stable TATHASTU SPINTEX: CARE Reaffirms B+ Rating on INR41cr LT Loan VASISHTA CONSTRUCTIONS: CARE Ups Rating on INR44.5cr Loan to C YASHAS FRP: CARE Reaffirms B+ Rating on INR2.29cr LT Loan J A P A N SHARP CORP: Public-Private Fund Might Lead Rehabilitation Quest * Japanese Auto Ratings Resilient Amidst Slow Economy, Fitch Says P A P U A N E W G U I N E A PAPUA NEW GUINEA: S&P Keeps LT B+ Rating, Revises Outlook to Neg. S I N G A P O R E GLOBAL A&T: Fitch Affirms 'B-' IDR & Revises Outlook to Negative S O U T H K O R E A DAEWOO SHIPBUILDING: Estimated to Hold Additional KRW1 Tril. Loss T A I W A N ACER INC: Fitch Expects to Withdraw Ratings Including 'BB-' IDR - - - - - ================= A U S T R A L I A ================= AUSTRALIA: ATO Hits Record in Winding-up Applications ----------------------------------------------------- Marianna Papadakis at afr.com reports that insolvency experts said the record number of winding-up applications filed by the Australian Taxation Office in the past six months is indicative of an aggressive approach taken towards struggling businesses and means legal action forcing companies to pay up or go into liquidation will continue to rise. afr.com relates that an ATO spokeswoman said it was not "cracking down small business" as some claimed, but was taking a balanced, fair and supportive approach to ensure that all small businesses meet their tax obligations. Figures compiled by Insolvency Notices, which tracks insolvencies and bankruptcies, showed there were 568 wind-up applications in September, following 582 wind-ups filed in May and well exceeding the ATO's long term average of 92 a month, according to afr.com. "We are focused on making it as easy as possible for businesses, and other taxpayers, to understand and meet their tax obligations," the report quotes the spokeswoman as saying. The spokeswoman said there were about 1,000 ATO-initiated small business wind-ups last year though there was a greater focus on legal action in the second half of the 2014/15 year with around 1200 wind up actions filed in this period, adds afr.com. BOAC PTY: First Creditors' Meeting Set For October 19 ----------------------------------------------------- Peter Reymond Quigley of Quigley & Co was appointed as administrator of Boac Pty Ltd, trading as Runway Bar & Restaurant, on Oct. 7, 2015. A first meeting of the creditors of the Company will be held at 17 Carnarvon Street, in Broome, WA, on Oct. 19, 2015. CHEM SPEC: First Creditors' Meeting Set For October 19 ------------------------------------------------------ Matthew Jess & Con Kokkinos of Worrells Solvency & Forensic Accountants were appointed as administrators of Chem Spec (Coatings) Pty Limited on Oct. 7, 2015. A first meeting of the creditors of the Company will be held at Worrells Solvency & Forensic Accountants, Level 15, 114 William Street, in Melbourne, on Oct. 19, 2015, at 4:30 p.m. FITGENES GROUP: Collapsed Into Voluntary Administration ------------------------------------------------------- Eloise Keating at SmartCompany reports that a health service provider that was turning over approximately AUD1.2 million has collapsed into voluntary administration. Fitgenes was incorporated in 2009 and provides personalised health care using a patient's genetic predispositions when it comes to fitness, health and nutrition. The Fitgenes Group operates a clinic in Perth and as of September 2014, was working with 350 clinics and more than 470 practitioners who use the company's proprietary cloud-based software. Fitgenes jumped on to the Australian Securities Exchange in the second half of 2014 through a reverse takeover of ATW Holdings. At the time Fitgenes chief executive Robert Mair told SmartCompany the company had plans to raise between AUD3 to AUD3.6 million by opening half a dozen new clinics, although ASX records show this prospectus offer was subsequently withdrawn in October 2014. In September, Mr. Mair said the Fitgenes group was turning over approximately AUD1.2 million annually, the report recalls. But less than a year later, shares in Fitgenes were suspended from trade on August 25 after the business did not pay its annual listing fee to the ASX, says SmartCompany. According to the report, Fitgenes notified the market on September 22 its annual fee had been paid, but trading in the company's shares would remain suspended while the directors of the company continued to address the terms of a proposed acquisition of another clinic provider, Sydney-based Elevate, which Fitgenes announced in July. On October 7, Fitgenes told the market it had appointed Domenic Calabretta of Mackay Goodwin as voluntary administration on October 6. In a letter to the ASX, Mr. Calabretta said his appointment followed an application to wind up the company, filed by an individual plaintiff in the Federal Court in South Australia on August 27, the report relays. SmartCompany notes that the wind-up application was adjourned until November 18 to allow the voluntary administration process of the company to proceed. "I am currently, with the assistance of the directors, reviewing the company's financial position and looking at potential avenues for the recapitalisation of the company or a potential sale of the company and its business," the report quotes Mr. Calabretta as saying in the letter. ICE TV: Forced Into Administration ---------------------------------- Cliff Sanderson at Dissolve.com.au reports that Ice TV Pty Limited, an Australian EPC provider, has been forced into administration. Tim Heesh and Amanda Lott of TPH Sydney Insolvency were appointed administrators of the company on Oct. 6, 2015, the report discloses. Dissolve.com.au relates that the development reportedly comes after ongoing delays in the delivery of its Skippa video recorder. According to the report, the administrators said Ice TV may stop trading if attempts to find a buyer fail. Strained relations with the manufacturer of Skippa pushed Ice TV into administration, the report states. The manufacturer stopped trading in Australia and changed its payment terms with Ice TV, adds Dissolve.com.au. NAT CARPENTRY: In Liquidation; 1st Creditors' Meeting Set Oct. 16 ----------------------------------------------------------------- Timothy Clifton and Daniel Lopresti of Clifton Hall were appointed as Joint and Several Liquidators of Nat Carpentry Pty Ltd on Sept. 30, 2015. A meeting of creditors will be held at 12:00 p.m. on Oct. 16, 2015, at Clifton Hall, Level 3, 431 King William Street, in Adelaide. VIRGIN AUSTRALIA: Fitch Raises Rating on Class D Notes to 'B+' -------------------------------------------------------------- Fitch Ratings has affirmed the class A notes at 'A' and upgraded class B (to 'BBB' from 'BB+'), class C (to 'BB' from 'B+') and class D (to 'B+' from 'B') notes for Virgin Australia Holdings Limited's (VAH, not rated publically) enhanced equipment notes (EEN) series 2013-1. Fitch's ratings cover approximately $595 million of outstanding senior and subordinated notes The upgrades to all of the subordinated tranches are driven by the general improvement of VAH's corporate credit profile in Fitch's view, while the upgrades of the B and C subordinated tranches are also driven by an increase in the recovery prospects due to rapid amortization of the notes and the corresponding decline in the transaction's loan-to-value (LTV). Since Fitch's last review of VA 2013-1 in October 2014 there has been substantial amortization of outstanding debt; debt was paid down $136.8 million. In addition, the initial pool featured two 737-700s which have subsequently been removed from the pool as the equipment notes and the corresponding EEN debt were repaid in full over the past two years. Key ratings considerations include the quality of the aircraft collateral, significant overcollateralization, the Australian and New Zealand insolvency regimes coupled with the transaction's underlying structure, the liquidity facilities, VAH's credit quality, and various additional structural elements. Fitch also noted such positive credit factors as low balloon payments for all tranches, short remaining expected maturities for the subordinated note classes, and rapid amortization of the notes resulting in significant expected LTV improvements for all tranches within the next several years. VA 2013-1 is the first EETC-type transaction relying on the Australian insolvency regime, which differs in key aspects when compared to Section 1110 and the Cape Town Convention (CTC; which incorporates most elements of Section 1110 protection in countries that have ratified the treaty) legal frameworks seen in most EETCs. Even though Australia signed the CTC into law in late June 2013, its implementation was not completed prior to the issuance of the notes. The CTC rules do not apply retroactively and Fitch expects VA 2013-1 notes will be governed under the Australian insolvency law until maturity. New Zealand is a CTC signatory and the CTC covers the six aircraft in this transaction that are leased in New Zealand. Fitch believes Australia's legal framework, combined with the structure of this transaction, create a situation similar to Section 1110/CTC as it allows creditors access to collateral in the event of insolvency. KEY RATING DRIVERS The A-tranche rating is primarily driven by a top-down analysis which evaluates the level of overcollateralization and likely recovery in a stress scenario. The ratings are supported by a strong collateral package consisting of Tier 1 aircraft with vintages ranging from 2003 to 2011. Market values for the remaining collateral aircraft (777-300ER and 737-800) have performed in line with Fitch's expectations since the launch of the transaction. The class A notes benefit from rapid principle amortization of the notes which outpaces the depreciation of the collateral value resulting in a relatively rapid decline in the transaction's LTV. Fitch's 'A' level stress scenario produces the maximum remaining LTV of 85%, down from 95.1% as of October 2014. The decline is in line with Fitch's initial expectations. The stressed LTV of 85% implies a good amount of cushion for senior tranche noteholders. The A tranche has a remaining weighted average life of 3.1 years. Unlike many other EETC transactions which feature smooth and constant LTV declines, LTV values of VAH 2013-1 are expected to increase on several occasions as older vintage aircraft are paid off and removed from the collateral pool. The largest increase in LTV is expected to occur in October 2018 when seven 2004 vintage 737-800s and the 777-300ER will be fully paid off. The eight aircraft will represent approximately 50% of the pool's value and their exclusion from the collateral will increase Fitch's forecast base LTV to 51.5% as of October 23, 2018, up from 36.9% as of July 23, 2018. Fitch anticipates the 'A' level stressed LTV values will not exceed 80%. The ratings are also supported by an 18-month liquidity facility provided by Natixis. The ratings for the subordinated tranches are driven by Fitch's view of VAH's corporate credit profile, a high affirmation factor, availability of the liquidity facility for the Class B notes, collateral coverage and the rights of each subordinated class noteholder to purchase all of the senior notes in certain cases. The ratings are also supported by seniority of interest payments for all subordinated notes over the principal distributions to the senior notes. The affirmation factor for this pool is considered high as both aircraft types in the transaction are core to VAH's fleet plan. The relatively large percentage of the company's primary aircraft type contained in this transaction makes it unlikely that the company would reject the pool in the case of administrative proceedings, in Fitch's view. The 737-800 is VAH's main aircraft type, fitting well with the airline's primarily short-haul business profile. The transaction's percentage of the fleet is projected to decline to below 4% beginning 2021, weakening the affirmation factor of the remaining pool. However, this is mitigated by the low LTV values expected by that time. Fitch believes that the likelihood of these aircraft being affirmed in a restructuring scenario effectively reduces the probability of default of subordinated tranches compared to VAH's credit profile. Each note is fully cross-collateralized, and all indentures are fully cross-defaulted from the date of the issuance of each applicable note. Fitch believes these provisions in VA 2013-1, which are standard enhancements of the modern EETC template, increase the likelihood that VAH would affirm these notes and the underlying aircraft and continue to make payments on the notes in the case of administrative proceedings. Taken together, these provisions treat all the aircraft as one pool of assets as the collateral supporting this transaction. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for VAH 2013-1 include: -- A high affirmation factor for the collateral aircraft in this pool; -- Current aircraft base values consistent with those provided by an independent appraiser; -- Depreciation rates and value stresses incorporated into Fitch's base and stress case scenario are in line with those used for similar Tier 1 assets as described in Fitch's EETC criteria. RATING SENSITIVITIES Fitch does not expect positive rating actions for the senior tranche. Potential ratings concerns for the senior tranche are primarily unexpected declines in aircraft values. Values for the 777-300ER could potentially be affected by the introduction of the A350-1000 and 777-9X; similarly, the 737-800 could be affected by the A320 NEO and 737 MAX. Fitch does not expect these risks to have a material impact in the near- to intermediate-term. Fitch may consider negative rating actions for the subordinated tranches of the transaction if VAH's credit profile weakens in Fitch's view, if Fitch revises its affirmation factor from high to medium or low, or if recovery prospects for one or all tranches deteriorate due to weakening of the collateral value. Fitch may consider positive ratings actions for the subordinated tranches of the transaction if VAH's credit profile improves in Fitch's view, if recovery prospects improve due to faster amortization of the notes compared to aircraft depreciation, or if aircraft values increase unexpectedly. LIQUIDITY Both the A- and B-tranches feature an 18-month liquidity facility provided by Natixis, which Fitch rates 'A'/'F1' with a Stable Outlook. The 'A' rating provides ample room above Fitch's liquidity provider threshold. If the liquidity service provider is downgraded below the level required by Fitch to support the EEN, VAH must find an alternative provider that is suitably rated to replace the downgraded provider or fund with incremental cash collateral to the full committed amount. Otherwise, the affected VAH 2013-1 will likely be downgraded. The liquidity facility is expected to cover up to six consecutive quarterly interest payments during an 18-month period in the event VAH defaults on its obligations, representing an additional source of default risk protection. The liquidity facility does not support principal payments. The liquidity service provider has the first priority claim, ahead of all EEN holders including the senior A-tranche. Accordingly, Fitch's Stress Case assumes a fully drawn liquidity facility on top of the waterfall, which adds an additional 3.4% of LTV through the facility as the most senior claim. FULL LIST OF RATING ACTIONS VAH 2013-1 -- Class A notes with an expected maturity of October 2023 affirmed at 'A'; -- Class B notes with an expected maturity of October 2020 upgraded to 'BBB' from 'BB+'; -- Class C notes with an expected maturity of October 2018 upgraded to 'BB' from 'B+'; -- Class D notes with an expected maturity of October 2016 upgraded to 'B+' at 'B'. WIRRANOOK HOLDINGS: First Creditors' Meeting Set For October 19 --------------------------------------------------------------- Daniel Lopresti and Simon Richard Miller of Clifton Hall were appointed as administrators of Wirranook Holdings Pty Ltd, trading Triple A Crash Repairs, Tom Howard Crash Repair Service & Rhino Crash Repairs North, on Oct. 7, 2015. A first meeting of the creditors of the Company will be held at Clifton Hall, Level 3, 431 King William Street, Adelaide, in South Australia, on Oct. 19, 2015, at 11:00 a.m. ========= C H I N A ========= CHINA: Gas Operators to See Healthy Customer Connection Growth -------------------------------------------------------------- Fitch Ratings says that China's city gas operators will continue to see healthy customer connection growth despite the slowdown in China's overall gas demand amid a slowing economy. Fitch expects one-off connection fees to continue to account for at least 30% of operators' total EBITDA over the next five years, even though EBITDA from more-stable gas sales now exceeds EBITDA contribution from one-off connection fees for most leading city gas operators, such as ENN Energy Holdings Limited (ENN, BBB/Stable) and China Resources Gas Group Limited's (CRG, BBB+/Stable). China's still-low city gas penetration (around 40%) and the regulatory push for cleaner energy -- should support connection growth even though the economic advantages of gas have been reduced with the fall in oil and coal prices. Fitch sees good prospects for CRG and ENN, notwithstanding the higher penetration in their existing footprints than the nation's average. Fitch observes city gas operators actively promoting residential connections, but adopting somewhat different strategies. For example, ENN has somewhat increased its focus in connecting older apartment buildings near its existing pipelines. The company estimates these connections cost about CNY200 more than connections at newly built apartments. The higher costs contributed to a slight decline in the connection business' EBITDA margin, but it still remained healthy at around 63% in 1H15, down from 65% for the same period last year. CRG has been chasing connection opportunities where available within its coverage areas. CRG reported its average residential connection fee in 1H15 fell 14% to CNY2,580 from CNY3,004 a year earlier. The company's management said the decline was due to more connections made in regions with lower fees. In some areas, connection fees can be as low as CNY1,200 per residential connection. CRG expects the wide geographic coverage and wide range of connection fees to result in volatility in the average residential connection fee over different reporting periods. CRG's average residential connection fee ranged between CNY2,500 and CNY3,500 with gross margin of 55% to 65% in the past due to differences in the mix of cities. However, segmental margin was not negatively affected; it was 48% in 1H15 compared with 45% for the same period last year, as economies of scale from the larger number of connections and the lower cost of connections in certain areas were able to offset the pressure on margins from lower connection fees in other areas. SKYPEOPLE FRUIT: Receives Nasdaq Listing Non-Compliance Notice -------------------------------------------------------------- SkyPeople Fruit Juice, Inc., a producer of fruit juice concentrates, fruit juice beverages and other fruit-related products, on Oct. 8 disclosed that on October 6, 2015, it received a written notice from the Listing Qualifications department of The Nasdaq Stock Market indicating that the Company is not in compliance with the minimum bid price requirement of $1.00 set forth in Nasdaq Listing Rule 5450(a)(1) for continued listing on the Nasdaq Global Market. The Nasdaq Listing Rules require listed securities to maintain a minimum bid price of $1.00 per share and, based upon the closing bid price for the 30 consecutive days ended October 5, 2015, the Company did not meet this requirement. SkyPeople has been provided a 180 day period in which to regain compliance. During this period, the closing bid price of the Company's ordinary shares must be at least $1.00 for a minimum of ten consecutive business days to regain compliance. In addition, in the event the Company does not regain compliance within the 180 day period, it may be eligible for a second compliance period to regain compliance if so granted by Nasdaq staff. The notification letter has no effect on the listing of the Company's ordinary shares at this time and the shares will continue to trade on the Nasdaq Global Market under the ticker "SPU". About SkyPeople Fruit Juice, Inc. SkyPeople Fruit Juice, Inc., a Florida company, through its wholly-owned subsidiary Pacific Industry Holding Group Co., Ltd., a Vanuatu company, and SkyPeople Juice International Holding (HK) Ltd., a company organized under the laws of Hong Kong Special Administrative Region of the People's Republic of China and a wholly owned subsidiary of Pacific, holds 99.78% ownership interest in SkyPeople Juice Group Co., Ltd. SkyPeople (China), together with its operating subsidiaries in China, is engaged in the production and sales of fruit juice concentrates, fruit beverages, and other fruit related products in the PRC and overseas markets. Its fruit juice concentrates are sold to domestic customers and exported directly or via distributors. Fruit juice concentrates are used as a basic ingredient component in the food industry. Its brands, "Hedetang" and "SkyPeople," which are registered trademarks in the PRC, are positioned as high quality, healthy and nutritious end-use juice beverages. * Sharp China Slowdown is Top Global Ratings Risk, Fitch Says ------------------------------------------------------------- Fitch Ratings' Risk Radar identifies a sharp slowdown in China's economy as the alternative scenario with the greatest risk to the agency's credit ratings portfolio. Regional and global spillover would affect a broad range of issuers. Fitch's ratings case is for a gradual slowdown, but equity market volatility and yuan devaluation highlight the economic adjustment and deleveraging challenges China is facing. In its interactive report, published today, Fitch discusses the impact a China hard landing would have on ratings and breaks down the impact on asset classes for the regions where the shock would hit hardest. In Asia, besides China itself, major emerging-market commodity exporters and small export-oriented economies would be most affected. The impact in Latin America would vary depending on trade links with China and sensitivity to commodities. Lack of growth is also a challenge in Europe. The report analyses how eurozone deflation and zero growth would affect Fitch's ratings across multiple asset classes. Other pressing alternative scenarios, including persistently low oil prices and higher US interest rates, are also detailed. Fitch's interactive Risk Radar frames the potential impact macroeconomic risks could have on Fitch's ratings portfolio and their relative urgency. Interconnected markets mean similar issues may have an impact on multiple asset classes. The Risk Radar provides independent and objective views on potential risks not currently incorporated into Fitch's base case analysis, and their potential ratings impact by asset class. ========= I N D I A ========= CHEEMA SPINTEX: ICRA Reaffirms D Rating on INR48.70cr Loan ---------------------------------------------------------- ICRA has reaffirmed its long term rating of [ICRA]D on the INR 48.70 crore fund based limits of Cheema Spintex Limited. ICRA has also reaffirmed its short term rating of [ICRA]D on the INR 15.0 crore (enhanced from INR9.0 crore) non-fund based limits of CSL. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Fund Based Limits 48.70 [ICRA]D; reaffirmed Short Term Non Fund Based Limits 15.00 [ICRA]D; reaffirmed The ratings reaffirmation takes into account delay in debt servicing by CSL due to its tight liquidity position owing to large losses. CSL had entered into a One Time Settlement (OTS) in March 2013 with one of its lenders for the outstanding dues, wherein a significant part of the outstanding debt was waived off. As per the OTS, the company was scheduled to repay INR 27.20 crore by June 2014, however, of this, an amount of INR 7.8 crore was outstanding as on March 31, 2015. The company further received sanction of a revised repayment schedule with the repayment period being extended till May 31, 2015. However the company has not been able to monetize surplus real estate assets which would have facilitated debt servicing. Going forward, a track record of timely debt servicing will be the key rating sensitivity. The other rating monitorables will be the quantum and timing of equity infusion and attainment of optimum capacity utilization. Incorporated in 1994, CSL was set up as a 100% export oriented unit by Mr. Harbhajan Singh Cheema and Mr. Hardyal Singh Cheema, in association with Punjab State Industrial Development Corporation (PSIDC). The company manufactures combed and carded cotton yarn in counts ranging from 20s to 30s; and has an installed capacity of 30,240 spindles. CSL exports its products mainly to Hong Kong, Taiwan, Bangladesh, China, South Korea, Singapore, Thailand, Malaysia, and Canada. In 2009-10, due to erosion of 100% of its net worth, the company had filed an application with the Board for Industrial and Financial Reconstruction (BIFR) for declaration of the company as sick under the Sick Industrial Companies Act (SICA). Recent results CSL reported, on a provisional basis, an operating income (OI) of INR113.37 crore and a net loss of INR20.01 crore for FY 2014-15, as against an OI of INR 110.81 crore and a net loss of INR 10.86 crore for the previous year. HILLSFOOD AGRO: CARE Assigns 'B' Rating to INR10.50cr LT Loan ------------------------------------------------------------- CARE assigns 'CARE B' and 'CARE A4' ratings to the bank facilities of Hillsfood Agro Beverages Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 10.50 CARE B Assigned Short-term Bank Facilities 0.30 CARE A4 Assigned Rating Rationale The ratings assigned to the bank facilities of Hillsfood Agro Beverages Private Limited (HAB) are primarily constrained by susceptibility of margins to fluctuation in raw material prices, working capital intensive nature of operations and fragmented nature of the industry with high competition from both small and large players. The ratings are further constrained by the recent commencement of operations and risks associated with the stabilization of operations. The ratings, however, derive strength from the experienced management team and positive outlook for the juice industry. Going forward, ability of the company to achieve the envisaged sales at projected profitability margins and manage the working capital requirements efficiently will remain the key rating sensitivities. Hillsfood Agro Beverages Private Limited (HAB) was incorporated in August, 2013 and is currently being managed by Mr Pradeep Kumar Gupta, Mr Pradeep Gupta and Mr Anuj Kumar Jindal. HAB has set up a fruit juice processing unit at Baddi, Himachal Pradesh with an installed capacity of about 13,500 Kilo litres of juice per annum. The company started commercial operations in April-2015. The company sells its products viz mango juice, apple juice, mixed juice etc under the brand name 'Juicewala' to various wholesalers and retailers located in different states of India through its network of super stockiest (15). HAB procures the raw materials viz. mango pulp, litchi pulp and apple directly from the suppliers based in Karnataka, Uttar Pradesh, Himachal Pradesh etc. while the packaging material (Aseptic packaging) is imported from China. The company is also engaged in trading of packaging material to other juice processing units in the near vicinity. The company has achieved Total Operating Income (TOI) of INR4.58 crore till July-15. J. J. CONSTRUCTIONS: ICRA Suspends B Rating on INR15cr Loan ----------------------------------------------------------- ICRA has suspended [ICRA]B rating assigned to the INR 15.00 crore term loan facility of J. J. Constructions. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. J. J. Constructions belongs to the Jalan group promoted by the Jalan brothers: Mr. Dwarka Jalan, Mr. Vijay Jalan and Mr. Sanjay Jalan in 1984. With around 20 years into the construction business, the group has developed over 100 commercial & residential projects admeasuring around five million sq.ft. Primarily in Pune. JAIPRAKASH POWER: CARE Lowers Rating on INR11,885cr Loan to 'D' --------------------------------------------------------------- CARE revises the ratings assigned to the bank facilities of Jaiprakash Power Ventures. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 11,885.00 CARE D Revised from CARE BB Long-term Bank Facilities 817.41 CARE B Revised from CARE BB Long-term Bank Facilities 2,409.95 CARE B Revised from CARE BB Long-term Bank Facilities 6,226.74 CARE BB Placed on Credit Watch Rating Rationale CARE has revised the ratings assigned to the bank facilities of Jaiprakash Power Ventures Ltd (JPVL) in respect of those availed for Nigrie thermal power project (NTPP) to 'CARE D' on account of the ongoing delays in debt servicing of these loans. The cash flows of the project have weakened as a result of subdued operating performance and the proposal for refinancing and additional financial assistance is under consideration with the lenders. Also, CARE has revised the rating assigned to corporate term loans and cement unit loans of JPVL to 'CARE D' due to weak liquidity and impending large repayment obligations in the near term for which funds are yet to be tied up. Also, CARE has revised the rating assigned to the bank facilities of JPVL in respect of Bina power project to 'CARE B' and placed under credit watch on account of binding MOU entered with JSW Energy Ltd for sale of the project. The rating of bank facilities of Vishnuprayag power project has been revised to 'CARE B' on account of deterioration in the overall financial risk profile of the company. Cash flows of the company have weakened due to continued high debt levels, relatively longer time taken and lower than expected realization from the sale of two power assets to the JSW group, and subdued operating performance of the thermal power assets. The rating continues to factor in experienced promoter group having long track record in the power segment. Going forward, performance of the various operational projects, timely monetization of assets as envisaged, raising of requisite funds to meet investment and other obligations, secure adequate fuel supply for the Nigrie. Brief Rationale TPP and timely implementation of the project under JPVL's subsidiary Prayagraj Power Generation Ltd (PPGCL) shall be the key rating sensitivities. JPVL, a 60.69% subsidiary of Jaiprakash Associates Ltd (JAL, rated 'CARE D') is engaged in power generation business and currently has one operational hydro power project of 400 MW (Vishnuprayag in Uttarakhand), and two thermal power projects of having 1,820 MW capacity (500 MW Bina and 1,320 MW Nigrie, Madhya Pradesh). JPVL has a presence in the power transmission business through its 74% subsidiary Jaypee Powergrid Ltd (JPL, rated 'CARE A-'), which has set up a 214-km transmission line. The company, through its subsidiary Prayagraj Power Generation Ltd (PPGCL), has 1,980-MW under implementation thermal power project in Bara, Uttar Pradesh. JPVL has recently transferred its Baspa and Karcham hydro power projects to Himachal Baspa Power Company Ltd (HBPCL) and divested it to JSWEL (rated 'CARE AA-/A1+' under credit watch). JPVL has also commissioned 2 MTPA cement grinding unit at Nigrie in June 2015. For FY15 (refers to the period April 1 to March 31), JPVL, on a standalone basis, reported PAT of INR137.21 crore on total operating income of INR4097.26 crore as against PAT of INR19.73 crore on the total operating income of INR2,746.83 crore in FY14. In Q1FY16 (unaudited), JPVL reported PAT of INR64.94 crore on the total operating income of INR1,209.37 crore as against PAT of INR69.15 crore on total operating income of INR787.02 crore in Q1FY15. JEWEL STAR: CARE Revises Rating on INR35cr LT Loan to BB- --------------------------------------------------------- CARE revises ratings assigned to bank facilities of Jewel Star. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank Facilities 35 CARE BB- Revised from CARE B+ The rating assigned by CARE is based on the capital deployed by the partners and the financial strength of the firm at present. The rating may undergo change in case of withdrawal of capital or the unsecured loans brought in by the partners in addition to the financial performance and other relevant factors. Rating Rationale The revision in the ratings of Jewel Star (JS) is on account of growth in scale of operations and improvement in debt protection metrics. The rating continues to factor in the strengths derived from experience of partners in the gems & jewellery industry and established relationship with customers. However, the rating continues to be constrained by the modest scale of operations, small capitalization, relatively low profitability margins, working capital intensive nature of operations, moderately leveraged capital structure and moderate debt coverage indicators. The rating further continues to be constrained by presence in the highly fragmented industry, geographical concentration risk and constitution of the entity being a partnership firm. Ability of the firm to improve its scale of operations and profitability margins amidst intense competition along with efficient management of working capital cycle are the key rating sensitivities. Established as partnership firm in 1992, Jewel Star (JS) is engaged in trading & processing of polished diamonds. JS is predominantly an export oriented unit with exports forming 86.70% of the total income in FY15 (refers to the period April 1 to March 31 - vis-a-vis 89.87% of FY14). The exports are primarily to Hong Kong, Belgium, Israel, USA, Switzerland, South Africa, Italy & Canada. The rough diamonds are primarily imported from Belgium, UAE and Hongkong with imports forming 86.23% of the total purchases in FY15 (vis-a-vis 86.87% of FY14). The processing units of JS are located at Bhavnagar & Surat (Gujarat). During FY15 (A), JS posted total income of INR128.21 crore (vis-a- vis INR96.11 crore in FY14) and earned PAT of INR2.14 crore (vis- a-vis INR1.69 crore in FY14). Moreover, during 5MFY15 (refers to the period April 01, 2015 to August 31, 2015), the firm has posted total income of INR47.52 crore. KIRAN BAWA: CARE Assigns 'B+' Rating to INR5cr LT Loan ------------------------------------------------------ CARE assigns 'CARE B+' rating to the bank facilities of Kiran Bawa Hotels Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 5 CARE B+ Assigned Rating Rationale The rating assigned to the bank facilities of Kiran Bawa Hotels Private Limited (KBHPL) is constrained by the relatively small scale of operations, fluctuating profitability margins, moderate capital structure & debt coverage indicators and project execution risk. The rating is further constrained by the highly competitive, fragmented and cyclical nature of the industry. These factors offset benefits derived from experienced management, operational synergies with group companies and healthy occupancy levels. The ability of KBHPL to maintain and improve the occupancy levels coupled with timely completion of the refurbishment expenditure are the key rating sensitivities. Incorporated in 1983, by Mr Pratapsingh P. Bawa and Mr Gurindersingh P. Bawa, Kiran Bawa Hotels Private Limited (KBHPL) is in to hospitably business and operates a hotel located at Dadar (Mumbai) under the name of "Hotel Bawa Regency" with room inventory of 31 rooms. KBHPL is part of Bawa group formed in 1983 by Mr Gurindersingh P Bawa, the group also operates other hotels in Mumbai. During FY15 (refers to the period April 1 to March 31), KBHPL has posted total operating income of INR3.41 crore (vis-a-vis INR3.17 crore in FY14) with PAT of INR0.25 crore (vis-a-vis INR0.49 crore in FY14). Moreover, the company has posted revenue of INR1.40 crore for the period April, 2015 to July, 2015. LOKESH MACHINES: CARE Reaffirms B- Rating on INR93.14cr LT Loan --------------------------------------------------------------- CARE reaffirms the rating assigned to the bank facilities of Lokesh Machines Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank Facilities 93.14 CARE B- Re-affirmed Short term Bank Facilities 27.00 CARE A4 Re-affirmed Rating Rationale The ratings of Lokesh Machines Limited (LML) continues to be constrained by the stretched operating cycle with working capital intensive nature of business, small scale of operations, revenue concentration from few clients and weak debt coverage parameters albeit improved in FY15 (refers to the period April 01 to March 31). The ratings also factor in the reschedulement of the Non-convertible Debentures. The ratings remain underpinned by the experienced promoters, reputed clientele and established relationship with key clients, satisfactory capital structure, equity infusion during FY15 & Q1FY16 and moderate industry outlook. The ability of the company to increase the scale of operations without any decline in operating margins and improve the liquidity position with efficient management of operating cycle are the key rating sensitivities. LML incorporated in December 1983 is promoted by Mr MLokeswara Rao and started commercial production from 1986. The company has six manufacturing locations with five in Hyderabad and one in Pune with an installed capacity of 600 Machines per annum. The company's operations are segregated into two divisions namely Machines and Components division. The company initially started the operations by doing job works for Hindustan Machine Tools Limited (HMT) and later on moved to manufacturing of machines. Under machinery division, LML manufactures Special Purpose Machines (SPM) and General Purpose Machines (GPM). Under component division, the company manufactures automobile components viz., cylinder heads, and cylinder blocks and also executes job work for automobile manufacturers like Mahindra & Mahindra Limited (M& M) and Ashok Leyland Limited (ALL). During FY15, LML reported PAT of INR0.75 crore (INR0.46 crore in FY14) on a total operating income (TOI) of INR118.69 crore (INR112.31 crore in FY14). As per the unaudited results for Q1FY16, LML reported net loss of INR0.85 crore on TOI of INR20.80 crore. MBM ENGINEERING: ICRA Reaffirms 'B+' Rating on INR9.25cr Loan ------------------------------------------------------------- ICRA has reaffirmed the long-term rating for the INR9.25 crore term loan facilities and the INR7.50 crore fund based facility of MBM Engineering Infotech Limited at [ICRA]B+. ICRA has also reaffirmed the short-term rating for the INR3.25 crore non-fund based facilities of MEIL at [ICRA]A4. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan facilities 9.25 [ICRA]B+; Reaffirmed Fund based facility 7.50 [ICRA]B+; Reaffirmed Non-fund based Facilities 3.25 [ICRA]A4; Reaffirmed The reaffirmation of the ratings considers the extensive experience of the promoters in the business of bearing component manufacture spanning over three decades; the improvement in MEIL's capital structure due to reduction in debt levels and its well- diversified client base. The ratings also take into account the stable revenues from wind generation business which aids the overall profitability of the company as well. However, the ratings are constrained by MEIL's modest scale of operations, high working capital intensity with stretched receivable position; high competition in the bearing component manufacturing restricting its bargaining power with customers. Additionally, ICRA also notes that the factory premise bought in a distressed sale in 2010 remains non-operational since purchase, thereby impacting the return indicators of MEIL. MEIL was started as a proprietorship entity in 1974 and later converted to a public limited company in 2000. The company is primarily engaged in the manufacturing of bearing components such as bearing sleeves, locknuts, washers, plummer blocks, locking assemblies, drawing items etc. of various dimensions according to the customer requirements. The company has a manufacturing facility located at Red hills, Chennai. Apart from manufacturing bearing components, the company owns two windmills in Karnataka and one in Tamil Nadu, with a cumulative capacity of 2.4 MW. MEIL was promoted by Mr.VMS Midha, who has academic qualifications and professional experience in the field of bearings spanning over four decades. The company is an ISO 9001:2008 certified entity. Recent results According to unaudited results, MEIL reported a net profit of INR0.6 crore on an operating income of INR19.8 crore during 2014- 15 against a net profit of INR0.2 crore on an operating income of INR17.3 crore during 2013-14. MSM STEELS: CARE Reaffirms B+ Rating on INR65.50cr LT Loan ---------------------------------------------------------- CARE reaffirms the ratings assigned to the bank facilities of MSM Steels Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 65.50 CARE B+ Reaffirmed Short-term Bank Facilities 6.80 CARE A4 Reaffirmed Rating Rationale The ratings assigned to the bank facilities of MSM Steels Private Limited (MSM) continue to be constrained by the relatively short track record of operations of the company, working capital intensive nature of operations, leveraged capital structure, albeit improvement led by equity infusion and intense competition from the organized and unorganized sector. The ratings, however, derive support from the experienced and resourceful promoters, diversified customer base and established supplier base, healthy revenue growth and moderate profitability indicators in FY15 (refers to the period April 1 to March 31). The ability of the company to maintain profitability margins and manage working capital cycle effectively and with continued financial support from the promoters remains the key rating sensitivity. MSM is a part of the Latur (Maharashtra) based 'Malang Group'. MSM was incorporated in 2009 as a partnership firm and the constitution was subsequently changed to a private limited company in 2010. The company started steel rolling at the end of FY12 with FY13 being the first full year of operations. The thermo- mechanical treated bar (TMT) bars are sold under the brand name as Gajraj 500 TMX bars. The company has a total installed capacity of 105,000 metric tonnes per annum (MTPA) of MS billets and 90,000 MTPA of TMT Bars as on March 31, 2015. The products find applications in building construction, infrastructure companies largely to the real estate sector. During FY15 (provisional), the company reported a total operating income of INR309.26 crore and a PBILDT and PAT of INR26.22 crore and INR4.50 crore, respectively, as against a total operating income of INR232.06 crore and a PBILDT and PAT of INR4.50 crore and INR7.9 crore, respectively, in FY14. NAVJIVAN COTTON: ICRA Reaffirms 'B' Rating on INR11.75cr Loan ------------------------------------------------------------- ICRA has reaffirmed the long term rating of [ICRA]B to the INR11.75 crore cash credit facility and the INR2.63 crore term loans of Navjivan Cotton Industries. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit Facility 11.75 [ICRA]B reaffirmed Term Loans 2.63 [ICRA]B reaffirmed The reaffirmation of rating takes into account NCI's moderate size of operations and weak financial profile characterized by low profitability levels, owing to the limited value addition in the business and the highly competitive and fragmented industry structure; its low return indicators, leveraged capital structure and weak debt coverage indicators. The rating also continues to remain constrained by the vulnerability of the firm's profitability to raw material prices which are subject to seasonality, and crop harvest; and the regulatory risks with regard to MSP fixed by GoI and restrictions on cotton exports. Further, ICRA notes that NCI is a partnership firm and any withdrawals from the capital account could impact the net worth and thereby the gearing levels; this remains a key rating sensitivity. The rating, however, continues to favourably factor in the experience of the firm's promoters in the cotton ginning industry, the advantage the firm enjoys by virtue of its location in the cotton producing belt of Saurashtra (Gujarat), and the stable demand outlook for cotton and cottonseeds in the medium term. Established in August 2013 as a partnership concern, Navjivan Cotton Industries commissioned operations on 10th February, 2014 and is engaged in cotton ginning, pressing and trading activities with a product profile comprising of cotton bales and cotton seed. The firm is promoted by Mr. Usman Kadiwar along with his family members who have an experience of around a decade in the cotton ginning industry vide their association with another firm engaged in the same line of business. Recent Results For the year ended March 31, 2015, the firm reported an operating income of INR 159.13 crore and profit after tax of INR0.20 crore against operating income of INR 16.27 crore and profit after taxation of INR 0.01 crore for the year ended March 31, 2014 (~1.5 months of operations). NIKKA MAL: CARE Reaffirms B+ Rating on INR11cr LT Loan ------------------------------------------------------ CARE reaffirms the ratings assigned to the bank facilities of Nikka Mal Pyare Lal Jain. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 11 CARE B+ Reaffirmed Short-term Bank Facilities 3 CARE A4 Reaffirmed Rating Rationale The ratings of Nikka Mal Pyare Lal Jain (NMP) continue to be constrained by its small scale of operations, low profitability margins, weak solvency position and elongated operating cycle. The ratings are further constrained by the constitution of the entity as a partnership firm and its presence in a highly fragmented industry. The ratings, however, continue to derive strength from the experienced partners and positive long-term outlook for the gems and jewellery industry. Going forward, the ability of NMP to increase its scale of operations while improving its profitability margins and solvency position will be the key rating sensitivities. Nikka Mal Pyare Lal Jain (NMP), a partnership concern, was established in April 2010. However, the firm commenced its operations from June 2011. NMP is engaged in the manufacturing and trading of gold and diamond jewellery with its retail outlet/showroom located at Ludhiana, Punjab. The firm procures pure gold bars from Bank of Nova Scotia while diamond gems and studs are purchased from wholesalers based in Mumbai, Delhi and Surat. The customer profile of the firm mainly comprises of other jewellers and individual customers located in Punjab and nearby regions. NMP reported a PAT of INR0.11 crore on a total income of INR42.95 crore in FY15 (refers to the period April 1 to March 31) as against the PAT of INR0.09 crore on a total income of INR40.82 crore in FY14. Furthermore, during FY16 (Provisional), the firm had achieved a total sales of around INR17 crore till August, 2016. ORIGIN LIFECARE: CARE Assigns B+ Rating to INR7cr LT Loan --------------------------------------------------------- CARE assigns 'CARE B+' rating to the bank facilities of Origin Lifecare Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facility 7 CARE B+ Assigned Rating Rationale The long-term rating assigned to the bank facilities of Origin Lifecare Private Limited (OFPL) is constrained by its thin profitability due to low value addition, high leverage, modest liquidity position and fragmented nature of the industry. The rating also constrained due to regulated risk associated with the pharmaceutical industry. However, the above weaknesses are partly offset by experience of the promoters and consistent growth in the scale of operations. Improvement in profitability and leverage position and the company's ability to effectively manage its working capital are the key rating sensitivities. Furthermore, continued compliance of regulatory requirement would also remain the key monitorable. Ahmedabad-based (Gujarat), OLPL was incorporated as a private limited company on June 24, 2010 through acquisition of operational pharmaceutical unit. The main products include Injectables, eye drops and dry powder injection. As on March 31, 2015 plant has the installed capacity of 43,200 metric tonne per annum (MTPA)for dry powder, 43, 200 MTPA for Ampoules and 2,16,00 MTPA for Vials. It has Schedule M-GMP certified facilities located at Vatva, Ahmedabad. Based on provisional results for FY15 (refers to the period April 1 to March 31), OLPL reported a total operating income of INR143.77 crore (P.Y: INR 50.24 crore) and profit after tax (PAT) of INR0.05 crore (P.Y: INR0.04 crore). ORIGIN MINERALS: CARE Assigns B+ Rating to INR5cr LT Loan --------------------------------------------------------- CARE assigns 'CARE B+' and 'CARE A4' ratings to the bank facilities of Origin Minerals Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facility 5 CARE B+ Assigned Long-term/Short-term Bank Facility 35 CARE B+/CARE A4 Assigned Rating Rationale The ratings assigned to the bank facilities of Origin Minerals Private Limited (OMPL) are constrained by yet to establish track record of operations, working capital intensive nature of operations and exposure to foreign exchange rates and commodity price fluctuation risk inherent in coal trading business. Nevertheless, the above rating weaknesses are partly offset by experienced promoters and infusion of equity capital as per terms of sanction and favorable demand scenario for steam coal. Ability of OMPL to scale up of its operations while efficiently managing working capital requirements is the key rating sensitivity. Ability to manage volatility associated with commodity prices and foreign exchange rates also remains crucial. Ahmedabad-based (Gujarat), OMPL was incorporated as a private limited company on April 11, 2013 to engage in trading of coal. It is promoted by Mr ArvindKumar Shrimal & Mr Dipen Kishorchandra Banker. Subsequently, Mr Amit Sharma, Chartered Accountant was inducted in the Board. Based on provisional financials for the 11 months ended Feb. 8, 2015, OMPL reported a total operating income of INR2.69 crore and profit after tax (PAT) of INR0.03 crore. PANCHAMI ELECTRONICS: CARE Assigns B+ Rating to INR5.60cr LT Loan ----------------------------------------------------------------- CARE assigns 'CARE B+' and 'CARE A4' ratings to the bank facilities of Panchami Electronics Pvt. Ltd. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 5.60 CARE B+ Assigned Short-term Bank Facilities 0.40 CARE A4 Assigned Rating Rationale The ratings assigned to bank facilities of Panchami Electronics Pvt. Ltd. (PEPL) are constrained by limited geographic presence, low profitability owing to highly competitive nature of the business, weak capital structure with low capital base, working capital intensive nature of operations, dependence on economic scenario and seasonal nature of business. The ratings, however, derive strength from PEPL's experienced promoters and established track record, established vendor relationship, consistent growth in total operating income and limited inventory obsolescence risk owing to support from manufacturers. The ability of the company to scale up of operations and improve its capital structure by prudent working capital management forms the key rating sensitivities. Incorporated in February 2007, Panchami Electronics Private Limited is engaged in retail of electronic home appliances. Having started its operations with just one Sony Exclusive showroom at Chilimbi, Mangaluru; the company presently runs four Sony brand stores and an exclusive retail outlet of Panasonic in the state of Karnataka. PEPL is also into wholesale business and is the distributors for Panasonic, Onida, Bosch, and Intex brands. PEPL has a sister concern viz. Panchami Distributors Private Limited (PDPL) which operates as a distributor for several electronics brands such as Sony, Whirlpool, and Haier. PANYAM CEMENTS: CARE Upgrades Rating on INR56.24cr Loan to 'C' -------------------------------------------------------------- CARE revises the rating assigned to the bank facilities of Panyam Cements And Mineral Industries Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 56.24 CARE C Revised from CARE D Short-term Bank Facilities 9.32 CARE A4 Revised from CARE D (Single D) Rating Rationale The revision in the ratings assigned to the bank facilities of Panyam Cements and Mineral Industries Limited (PCMIL) takes into account the regularization of debt servicing due to improvement in financial performance and liquidity position of the company from Q4FY15 (refers to the period January 01 to March 31) onwards led by recommencement of operations from October 2014 and increase in demand for cement due to improved business sentiments across industry in Telangana and Andhra Pradesh post bifurcation of Andhra Pradesh state. The ratings also factor in the long experience and satisfactory track record of promoter in diversified business, location advantage of the plant and growth in total operating income and operating profit in FY15 (refers to the period April 1 toMarch 31) vis-a-vis op. loss in FY14. The ratings, however, continue to be constrained by PCMIL's leveraged capital structure, working capital-intensive nature of the business and significant exposure to the group companies. The ability of the company to increase the scale of operations and improve profit margins, capital structure, liquidity position and effectively manage its working capital requirements are the key rating sensitivities. Panyam Cements & Mineral Industries Limited (PCMIL), incorporated in June 23, 1955, is part of the Nandi Group of Industries based out of Nandyal in Andhra Pradesh. Nandi group is promoted by Mr SPY Reddy. Since 1978, the group has built a diversified presence in segments such as cement, dairy, PVC pipes, construction, TMT bars etc. CARE has rated some of the companies of the group; Anantha PVC Pipes Private Ltd. (rated CARE B/CARE A4), SPY Agro Industries Limited (rated CARE B-/CARE A4), Nandi Pipes Private Ltd. (rated CARE B+/CARE A4), Shreekanth Pipes Private Ltd. (rated CARE B+/CARE A4) etc. PCMIL is currently engaged in manufacturing of Ordinary Portland Cement (OPC) 53 grade & 43 grade and Pozzolona Portland cement (PPC) with installed capacity of 1 million tons per annum. PCMIL was acquired by Nandi Group from its earlier promoters, Mr M V Subba Rao and associates, during September 2004 following company turning sick with accumulated losses. Over the years, Nandi Group has successfully revived the company and has undertaken large modernization and expansion projects to increase PCMIL's scale of operations and reduce operational costs. PARTHAS: CARE Revises Rating on INR14.16cr LT Loan to B+ -------------------------------------------------------- CARE revises rating assigned to the bank facilities of Parthas. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 14.16 CARE B+ Revised From CARE BB- Rating Rationale The revision in the rating factors in the deterioration in the financial risk profile of Parthas, Trivandrum marked by decline in income, sharp decline in profitability and significant decline in cash accruals in FY15 (refers to the period April 1 to March 31). The revision in the rating also factors in the time and cost over runs on the debt-funded capital expenditure to expand show room space. The rating continues to be constrained by weak capital structure with negative networth due to high withdrawals by partners in the past, working capital intensive nature of operations and concentration risk with the revenue stream limited to one showroom at Thiruvananthapuram, in Kerala. The rating is also constrained by the intense competition in the region and the exposure to group entities in the form of loans and advances. The rating, however, continues to derive comfort from the experience of the partners, long operational track record of the firm and the favourable image of the 'Parthas' brand. Going forward, the ability of Parthas to grow its revenue, improve profitability and accruals amidst increasing competition and rising costs will be critical. Besides, the entity's ability to manage its working capital borrowings prudently and complete its capex without elevating its debt levels further would be the key rating sensitivities. Parthas (Parthas-T) is a partnership firm engaged in retailing of branded garments/ textiles through its retail showroom having an area of about 50,000 sq. ft. and located at the heart of Trivandrum city in Kerala. The firm is part of the Parthas Group, engaged in retailing of textiles primarily in the Kerala market. The Parthas Group was promoted in 1960 by (Late) Mr Lakshmana Reddiar and (Late) Mr Sreenivasa Reddiar (brothers- in-law) at Kottayam. Currently, there are two different groups engaged in retailing of textiles under the Parthas brand name and managed by the two families in four different locations, Trivandrum, Kottayam, Ernakulum and Nagercoil(which is under development). At present, sons of (L) Mr Sreenivasa Reddiar, Mr Nagarjulu, Mr Arjunan, Mr Viswanathan and Mr Rajakrishnan, along with Mr Lakshman (S/o.Mr Nagarjulu) are the partners in Parthas-T, managing the day-to-day operations as well as attending to strategic matters. The Kottayam and Nagercoil showroom is managed by the sons of (L) Mr Sreenivasa Reddiar through a separate partnership firm. Parthas - T was also operating a movie theatre in Trivandrum in the same building complex. It has been non-operational since March 2010. The revenue share of the theatre was negligible and the firm is expanding its show room into the area earlier occupied by the theatre. Parthas - T is being managed by second-generation entrepreneurs. All the partners possess considerable experience in the retailing of textiles. Mr Lakshmana Reddiar's sons, are engaged in the same line of business through 'Parthas Textiles' (Ernakulam, Kerala) which has export operations also. Parthas - T has achieved a PAT of INR0.21 crore on a total operating income of INR60.20 crore in FY15 provisional as compared with a PAT of INR1.74 crore on a total operating income of INR69.46 crore in FY14 Audited. PONDICHERRY TINDIVANAMTOLLWAY: CARE Reaffirms B LT Loan Rating -------------------------------------------------------------- CARE reaffirms the rating assigned to bank facilities of Pondicherry Tindivanamtollway Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 210.94 CARE B Reaffirmed Rating Rationale The rating assigned to the bank facilities of Pondicherry Tindivanam Tollway Limited (PTTL) continues to be constrained by the stretched liquidity position of the company, traffic risk associated with a toll-based project owing to the uncertainty in traffic and in turn revenue, Operations and Maintenance (O&M) risk and absence of fixed-price major maintenance contract. The rating is, however, underpinned by the experienced promoters, various forms of supports committed by the sponsors, fixed short term revenue contract for FY15 (refers to the period April 1 to March 31) for toll collection and commercial importance of the stretch albeit presence of alternate routes. The ability of the company to achieve the envisaged toll revenue, overall effective cash flow management and /or occurrence of force majeure events are viewed as the key rating sensitivities. Pondicherry Tindivanam Tollway limited (PTTL) is a Special Purpose Vehicle (SPV) incorporated on March 27, 2007, to undertake the strengthening and four-laning of 37.92 km stretch on the Pondicherry-Tindivanam section of NH-66, in the state of Tamil Nadu. It is promoted by the consortium of Nagarjuna Construction Company Limited (NCC) along with its fully owned subsidiary NCC Infrastructure Holdings Ltd, IL&FS Engineering Constructions Ltd (ILFS- formerly Maytas Infra Private Limited) and Terra-Projects Limited. The Concession Agreement (CA) was executed between PTTL and National Highways Authority of India (NHAI) on July 19, 2007 for a concession period of 30 years from the date of financial closure, including the construction period of 30 months. The Scheduled Project Completion Date (SPCD) of the project was July 14, 2010. However, on account of delay by NHAI in handing over the land, the construction could not be completed within the scheduled time. PTTL received an Extension of Time (EOT) for COD till April 27, 2011, from NHAI. The project, however, received Provisional COD and commenced tolling from December 12, 2011. The actual cost incurred in the project was INR361.96 crore as against the estimated cost of INR314.62 crore. In September 2013, PTTL applied for bilateral restructuring and the same had been approved by the lenders wherein it was stipulated that the repayment of existing loans will commence from June 2020 and Funded Interest Term Loan (FITL) will be repaid in bullet repayment in 2028. For FY15, PTTL registered a total income of INR13.50 crore with a net loss of INR18.64 crore vis-…-vis total income of INR12.31 crore and net loss of INR20.45 crore in FY14. Further for Q1FY16 PTTL has registered tolling income of INR3.64 crore with a net loss of INR4.72 crore. REAL GROW: CARE Reaffirms B+ Rating on INR29.80cr LT Loan --------------------------------------------------------- CARE reaffirms the ratings assigned to bank facilities of Real Grow Exims India Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 29.80 CARE B+ Reaffirmed Short-term Bank Facilities 2.00 CARE A4Reaffirmed Rating Rationale The ratings assigned to bank facilities of Real Grow Exims Private Limited continues to remain constrained by the short track record of operations, trading nature of business resulting in thin profitability margins, low cash accruals, leveraged capital structure, working capital intensive nature of operations and intense competition in the industry. The ratings, however, are underpinned by satisfactory experience of the promoters and moderate industry growth prospects. The ability of the company to improve its business volume, strengthen the client base and efficiently manage the working capital requirements are the key rating sensitivities. Incorporated in May 2012, Real Grow Exims Private Limited (Real Grow) is promoted by Mr Goluguri Venkata Reddy, Mr Karri Venkata Srinivasa Reddy and Mr G N V S Satyanarayana Reddy. The company commenced its operations from June 2014 and is engaged in trading of aqua feed for fish and prawns feeds in West Godavari district, Andhra Pradesh. The promoters have long established presence in the fish feed industry through several other group companies viz. Reddy and Reddy Imports and Exports, Nutrient Marine Foods limited (rated CARE BB/CARE A4) and Nexus Feeds Ltd. (rated CARE BBB-/CARE A3) which are engaged in fish and prawns feed/shrimp processing business. During FY15 ((Provisional), refers to the period April 1 to March 31), Real Grow achieved PBILDT of INR2.92 crore and PAT of INR0.60 crore on a total operating income of INR93.64 crore. As per the unaudited financials for 5MFY16, Real Grow has achieved PBILDT of INR2.70 crore on a total operating income of INR54.85 crore. RP RESORTS: ICRA Assigns 'D' Rating to INR10cr Long Term Loan ------------------------------------------------------------- ICRA has assigned the long-term rating of [ICRA]D to the INR10.00 crore term loan facility and the INR10.00 long-term proposed facilities of RP Resorts Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term-Term loan facilities 10.00 [ICRA]D, assigned Long-term-Proposed Facilities 10.00 [ICRA]D, assigned The assigned rating reflects current delays in debt servicing caused by liquidity shortfalls arising out of seasonality in business and insufficient moratorium on term loan repayment amidst ongoing renovation. The Company scale of operations is small with its operations geographically concentrated on its single property near Kozhikode. While the Company's occupancy level is largely dependent on airline crew impacting its overall Average Room Revenue (ARR), its operating margin has been impacted over the last two fiscals owing to renovation undertaken at its property. The Company also has large investments in its group companies. However, ICRA also considers the Company's position as part of the RP group of Companies, management tie-up with ITC group of hotels for the "Welcom" brand, benefitting it from the marketing and advertising network of ITC. The Company also has low gearing aided by its strong net worth position. Going forward, a track record of timely debt servicing, driven by improvement in the Company's liquidity position will be a key rating sensitivity. RP Resorts Private Limited operates a single 117 room five-star resort-Welcom Hotel Raviz Kadavu located near Kozhikode. The Company has a marketing tie up under the Welcom brand of ITC group of hotels. The resort was acquired by the current promoters in 2010. The resort has three restaurants, a bar, an amphitheatre, three conference/banquet halls, an Ayurveda centre with four rooms, a tennis court, health club and a swimming pool. The Company is part of the RP Group of companies founded by Dr. Ravindran Pillai. The group has several companies operating under various divisions like construction & infrastructure, real estate development, hotels & hospitality, travel & tourism, healthcare & wellness, education, information technology, trading and retail and malls operating in India as well as in the Middle East. Recent Results In 2014-15, RPRPL reported a net loss of INR1.3 crore (un-audited & provisional) on an operating income of INR17.5 crore (un-audited and provisional) as against a net loss of INR 0.1 crore on an operating income of INR 16.0 crore in 2013-14. SAFE DEVELOPMENT: ICRA Assigns D Rating to INR26.10cr LT Loan ------------------------------------------------------------- ICRA has downgraded the long-term rating assigned to the INR23.90 crore (revised from INR49.76 crore) term loan facilities of Safe Development Alms Trust from [ICRA]B+ to [ICRA]D. ICRA has also assigned a long term rating of [ICRA]D to the INR26.10 crore proposed facilities of SDAT. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Fund Based Facilities 23.90 Downgraded to [ICRA]D Long Term Proposed facility 26.10 Assigned [ICRA]D The downgrade of the rating takes into account the persistent delays witnessed in the servicing of debt obligations by the trust. The rating also reflects the stretched financial profile of the trust, characterized by, high gearing, stretched coverage indicators and poor cash flow position resulting from the ongoing capital expenditures. ICRA, however, takes note of the healthy increase in revenues over the past few years, albeit on a small base; the improved profitability; and the extensive experience of the promoters in the educational sector spanning over two decades. Safe Development Alms Trust, established in the year 1993 by Mr. P.V. Hassan with the objective of providing general healthcare services to the public and promote medical and paramedical education, has its headquarters at Palakkad, Kerala. The Trust currently manages Karuna Hospital (a super-specialty hospital with 175 bed facility), Karuna Medical College Hospital (600 bed facility), Karuna Medical College (100 seats) and Karuna College of Nursing (50 seats). The Karuna Medical College has 100% occupancy since inception owing to healthy demand for medical education in the country. The Trust reported a net profit of INR9.9 crore on an operating income of INR38.1 crore during 2013-14 as against a net profit of INR7.0 crore on an operating income of INR31.5 crore during 2012- 13. SONATA CERAMICA: CARE Ups Rating on INR5.20cr LT Loan to BB- ------------------------------------------------------------ CARE revises/reaffirms the ratings assigned to the bank facilities of Sonata Ceramica Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 5.20 CARE BB- Revised from CARE B+ Short-term Bank Facilities 1.75 CARE A4 Reaffirmed Rating Rationale The revision in the long-term rating assigned to the bank facilities of Sonata Ceramica Private Limited (SCPL) was primarily on account of increase in total operating income (TOI) and cash accruals in FY15 (refers to the period April 1 toMarch 31), moderate liquidity indicators coupled with successful completion of debt funded capex. The ratings continue to remain constrained due to its modest scale of operations in a highly competitive and fragmented industry, moderate profit margins which are susceptible to volatility in prices of raw material and fuel and elongated operating cycle. The ratings, however, continue to derive strengths from the vast experience of the promoters in tile manufacturing industry and its presence in the ceramic tile hub with easy access to raw material and power and fuel coupled with comfortable capital structure and debt coverage indicators. SCPL's ability to increase its scale of operations along with improvement in profitability and efficient working capital management are the key rating sensitivities. Incorporated in August, 2002, SCPL is engaged in manufacturing of ceramic tiles of 2x2 inch, 12x18 inch, 300x300 mm, 302x302 mm, 508x508 mm and 605x605 mm sizes. The company is also engaged in trading of vitrified tiles, floor tiles, wall tiles etc. SOPL's facility is located at Himmatnagar and has an installed capacity of 13.50 Lakh Square feet per Annum (SSPA) for manufacturing of ceramic wall tiles as on March 31, 2015. As per the audited results of FY15, SCPL reported profit after tax (PAT) of INR0.44 crore on a total operating income (TOI) of INR31.28 crore as against PAT of INR0.41 crore on a TOI of INR26.57 crore during FY14. As per the provisional results for 5MFY16, SCPL reported turnover of INR13.15 crore. SPINTEX INDIA: ICRA Assigns 'B' Rating to INR15cr Term Loan ----------------------------------------------------------- ICRA has assigned a long-term rating of [ICRA]B to the INR15.00 crore (enhanced from INR12.00 crore) term loan limits of 4S Spintex India Private Limited. ICRA has also assigned ratings of [ICRA]B/[ICRA]A4 to the INR6.00 crore long-term/short-term, unallocated limits of the company. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan 15.00 [ICRA]B assigned/outstanding Unallocated Limits 6.00 [ICRA]B/[ICRA]A4 assigned The assigned rating is constrained by significant funding risk with only INR2.78 crore of promoter equity brought in and high project implementation risk arising out of nascent stage of the plant construction with only INR3.88 crore of cost incurred as on August 25, 2015. The company has availed term loan of INR1.10 crore as on August 25, 2015 out of the INR15.00 crore sanctioned term loan from bank. The rating is also constrained by the highly fragmented nature of the cotton yarn spinning industry, small scale of operations and commoditized nature of the product leading to low pricing power. However, the rating positively factors in the experience of the promoters with more than two decades of experience in cotton ginning industry and location advantage of 4SSIPL on account of proximity to ginned cotton supply centers in Andhra Pradesh. Going forward, timely completion of the project without cost overruns and ability of the company to generate sufficient accruals at the envisaged capacity utilization will remain key rating sensitivities from credit perspective. 4S Spintex India Private Limited (4SSIPL) was incorporated in August 2012 and is setting up a manufacturing unit of yarned cotton with an installed capacity 8160 spindles in Jaggaiahpet Mandal, Krishna District, Andhra Pradesh. The estimated cost of the project is around INR24.20 crore, to be funded by debt of INR15.00 crore from bank and INR9.20 crore of promoter's contribution. The company is promoted by Mr. D.V.V. Satyanarayana, Mr. Devarapalli Chalapathi Rao who has more than two decades of experience in cotton ginning. SREE DRG: CARE Assigns 'B' Rating to INR7.23cr LT Loan ------------------------------------------------------ CARE assigns 'CARE B' AND 'CARE A4' rating to the bank facilities of Sree Drg Vinyls Industries. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 7.23 CARE B Assigned Short-term Bank Facilities 1.25 CARE A4 Assigned Rating Rationale The ratings assigned to the bank facilities of Sree DRG Vinyls Industries (SDVI) are constrained by the small scale of operations, declining profitability margins and weak capital structure. The ratings are also constrained by tight liquidity position arising from its elongated operating cycle and factors in the limited negotiation capabilities with large clients in the auto segment. The rating derives comfort from the long experience of the partner of nearly three decades in the textile industry. Going forward, ability of the firm to scale up operations, improve profit margins and its ability to prudently manage its working capital requirements will be the key rating sensitivities. SDVI is a partnership firm established in the year 2009 by Mr R G Chandrasekkar along with his wife Mrs Jayanthi and daughter Ms Sowmya who is a minor partner. The firm is primarily engaged in the manufacturing of Poly Vinyl Chloride/Poly Urethane (PVC/PU) leather cloth which is used as domestic upholstery, automobile upholstery, ladies bags, manufacturing footwear, wall paneling, belts, purses, wallets etc. SDVI is engaged in both domestic and export sales. The domestic sales contribute 80% of the total sales and balance 20% is contributed by exports. The export sales are to Srilanka, Dubai, Ethiopia, Kuwait, and Tanzania. SDVI's knitting division(backward integration) has two circular knitted machines to manufacture knitted fabrics, being used as backing fabrics whereas woven fabricfor the manufacture of PVC Leather Cloth is outsourced. SDVI is part of the DRG Group with interests intrading of PVC leather and furnishing fabrics as well as hospitality business through group concerns. The firm achieved PATof INR0.21 crore on total operating income of INR24.22 crore in FY15 (refers to the period April 1 to March 31 - Provisional) as compared to a PAT of INR0.11 crore on total operating income of INR23 crore in FY14. SRI MOULI: Ind-Ra Assigns B+ LT Issuer Rating; Outlook Stable ------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Sri Mouli Textiles Private Limited (SMPTL) a Long-Term Issuer Rating of 'IND B+'. The Outlook is Stable. Rating actions on SMTPL's bank loans: Amount Facilities (INR Million) Ratings ---------- ------------- ------- Long-term loans 101.2 Assigned 'IND B+'/ Stable Fund-based 80.0 Assigned 'IND B+'/ Facilities Stable/'IND A4' Non-fund-based 8.2 Assigned 'IND A4' facilities KEY RATING DRIVERS The ratings reflect SMTPL's small scale of operations and weak credit metrics. Unaudited FY15 financials indicate revenue of INR99 mil., net leverage (total Ind-Ra adjusted net debt/operating EBITDAR) of 12.9x and EBITDA interest cover of 1.3x. EBITDA margins were strong at 16.3% at FYE15. FY15 was SMTPL's first year of operations as production commenced in Oct. 2014. The ratings also factor in the risks associated with the agricultural commodity based manufacturing business. The ratings are supported by SMTPL's comfortable liquidity with around 61% utilization of the fund-based working capital facility during the 12 months ended July 2015. RATING SENSITIVITIES Positive: A substantial increase in the scale of operations while maintaining the profitability leading to a sustained improvement in the credit profile will lead to a positive rating action. Negative: A substantial decline in the revenue or profitability resulting in sustained deterioration in the credit profile will lead to a negative rating action. COMPANY PROFILE Incorporated in 2011, Andhra Pradesh based SMTPL operates an open- ended spinning unit. It manufactures cotton yarn in the range of 8s and 24s counts. It has an installed capacity of 1,344 rotors. TATHASTU SPINTEX: CARE Reaffirms B+ Rating on INR41cr LT Loan ------------------------------------------------------------- CARE reaffirms the ratings assigned to the bank facilities of Tathastu Spintex Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 41.00 CARE B+ Reaffirmed Long-term/Short-term Bank Facilities 1.75 CARE B+/CARE A4 Reaffirmed Rating Rationale The ratings of Tathastu Spintex Private Limited (TSPL) continue to be constrained on account of project execution risk associated with green field project (for setting up the cotton yarn manufacturing facility) along with the debt laden funding pattern of project. The ratings are further constrained by the susceptibility of TSPL's profit margin to volatile cotton and cotton yarn prices and presence in the highly competitive cotton yarn segment. The ratings, however, continue to derive strength from promoter's experience, technical services of professionals availed by the promoters to partially mitigate the execution risk, availability of various government benefits apart from TSPL's favourable location. TSPL's ability to complete the envisaged project within time and cost parameters as well as its ability to achieve the envisaged level of scale of operations and profitability would be the key rating sensitivities. Incorporated on April 2015, Tathastu Spintex Private Limited (TSPL) is a Morbi based entity promoted by Mr Ashwin Bhatasna and Mr Mukesh Savsani. TSPL is setting up a green-field project in Tankara (situated on outskirts of Morbi) of installing 16,320 spindles having an installed capacity of producing 3,300 Metric Tonnes Per Annum (MTPA) of cotton yarn. The total cost of the project is envisaged at INR63.77 crore to be funded through a debt and equity in proportion of 2.19:1 respectively. Financial closure for the project is yet to be achieved and commercial production is expected to commence from July 2016. Furthermore, the company is under process of getting all the necessary approvals post which it will start implementing the project. As on September 14, 2015, TSPL has incurred the total cost of INR1.63 crore towards capex and the same has been met from promoter's equity. VASISHTA CONSTRUCTIONS: CARE Ups Rating on INR44.5cr Loan to C -------------------------------------------------------------- CARE revises the ratings assigned to bank facilities of Vasishta Constructions Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank Facilities 44.50 CARE C Revised from CARE D Long term/Short term Bank Facilities 130.00 CARE C/CARE A4 Revised from CARE D Rating Rationale The revision in the ratings assigned to the bank facilities of Vasishta Constructions Pvt Ltd (VCPL) takes into account improved liquidity profile on account of recovery of bills receivables resulting in regularisation of debt servicing. The ratings are underpinned by experience of promoters, healthy growth in order book size coupled with faster movement of few high value projects, increased scale of operation coupled with improved net profit in FY15 (refers to the period April 1 to March 31), improved leverage position with repayment of term debt and moderate industry outlook. The ratings are, however, constrained by concentrated order book position, satisfactory utilization of bank borrowings and limited experience in executing the projects of relatively large size. The ability of the company to manage the growth and ensure timely execution of projects and recovery of contracts proceeds in timely manner and improve liquidity profile with effective management of working capital are the key rating sensitivities. Incorporated in October 1991, VCPL is engaged in construction activities spanning irrigation & flood control, roads & bridges, building & structures, etc. VCPL is promoted by Mr M Naga Raju, Mr M Sivarama Raju, Mr M S Subba Raju and Mr D Ravi Kumar. The promoters have around 25-30 years of experience in executing civil contracts for government entities and private players in the aforesaid segments. During FY15, VCPL achieved PBILDT of INR32.68 crore (against PBILDT of INR28.77 crore in FY14) with PAT of INR15.04 crore (against PAT of INR8.22 crore in FY14) on a total operating income of INR266.41 crore (against total operating income of INR213.53 crore in FY14). As per the unaudited results of Q1FY16 (refers to the period April 1 to June 30), VCPL has achieved PAT of INR3.74 crore on a total operating income of INR73.15 crore. YASHAS FRP: CARE Reaffirms B+ Rating on INR2.29cr LT Loan --------------------------------------------------------- CARE reaffirms the ratings assigned to the bank facilities of Yashas Frp Manufacturing Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 2.29 CARE B+ Reaffirmed Long-term/Short term Bank 4.50 CARE B+/CARE A4 Facilities Reaffirmed Rating Rationale The ratings assigned to the bank facilities of Yashas FRP Manufacturing Private Limited (YFM) remained constrained on account of its modest scale of operations, low net-worth base, leveraged capital structure and weak liquidity position. Furthermore, the ratings remain constrained by its presence in a highly competitive and fragmented industry. The ratings factor in the increase in operating income along with improvement in solvency position and operating cycle albeit decline in profitability during FY15 (refers to period April 1 to March 31). The ratings continue to draw strength from experience of the promoters and established customer base. YFM's ability to increase its scale of operation, improve its profitability and capital structure while efficiently managing its working capital requirements remain the key rating sensitivities. YFM is a closely held private limited company incorporated on May 5, 2008 and started its operations from November2008. YFM is promoted by Mr Sanjay Gupta and Ms Shalini Gupta. YFM has its manufacturing facilities located at Indore spread over 18,000 sq ft having a capacity of 75 tonnes per month or 900 tonnes per annum. YFM is engaged into the business of manufacturing Fiber- glass Reinforced Plastic (FRP) products such as fans & general moulding products, cable management systems, custom structural profiles, hand-railings & ladders, mass transportation interiors & exteriors. During FY15 (provisional; refers to the period April 1 to March 31), YFM earned a PBT of INR0.18 crore on a total operating income (TOI) of INR9.37 crore as against a PAT of INR0.27 crore on a TOI of INR5.97 crore during FY14. ========= J A P A N ========= SHARP CORP: Public-Private Fund Might Lead Rehabilitation Quest --------------------------------------------------------------- The Japan Times reports that a public-private fund might invest in struggling Sharp Corp. to lead the electronics maker's turnaround, sources close to the matter said. According to the report, the investment might amount to around JPY200 billion ($1.7 billion), the sources said on October 10. Sharp's liquid crystal display panel business is expected to post a higher than expected operating loss of JPY50 billion in the first half because of the economic slowdown in China, they said. If Innovation Network Corp. of Japan chooses to invest, its support would be broader than earlier thought. Sharp, which secured a JPY225 billion ($1.9 billion) bailout from major banks in May, initially planned to accept investment only in its key display panel division, the sources said, the report relays. According to the report, sources said Taiwan's Hon Hai Precision Industry Co., better known as Foxconn, was said to have been interested in acquiring Sharp. But the Ministry of Economy, Trade and Industry, which has jurisdiction over INCJ, has expressed concern that Sharp's unique technologies, including its Igzo display panels for smartphones and other devices, could be siphoned off abroad. With a stake in Sharp, INCJ would be comprehensively involved in its reconstruction, the report notes. About Sharp Corp. Based in Osaka, Japan, Sharp Corporation (TYO:6753) -- http://sharp-world.com/-- manufactures and sells electronic telecommunication devices, electronic machines and components. As reported in Troubled Company Reporter-Asia Pacific on July 3, 2015, Standard & Poor's Ratings Services said that it has raised its long-term corporate credit rating on Sharp Corp. to 'B- ' and its short-term corporate credit rating on the company to 'B', both from 'SD' (selective default). The outlook on the long- term corporate credit rating is negative. On June 30, 2015, S&P lowered the long- and short-term corporate credit ratings to 'SD' because Sharp carried out a de facto debt-for-equity swap. S&P revised the ratings following completion of the transaction, which resolved the situation that it defines as 'SD'. S&P raised its long-term debt rating on Sharp to 'B-' from 'CCC+' and S&P's commercial paper (CP) program rating to 'B' from 'C', one notch for each, and removed the ratings from CreditWatch. S&P raised the long-term corporate credit rating on overseas subsidiary Sharp International Finance (U.K.) PLC three notches to 'B-' and S&P's short-term corporate credit rating and its CP program rating one notch to 'B' and also removed the ratings from CreditWatch. * Japanese Auto Ratings Resilient Amidst Slow Economy, Fitch Says ----------------------------------------------------------------- Fitch Ratings says Japanese automakers -- Toyota Motor Corporation (A/Stable), Honda Motor Co., Ltd (A/Stable) and Nissan Motor Co., Ltd (BBB/Positive) -- are likely to have sufficient ratings headroom to weather larger-than-expected sales volume declines and margin erosion, should global growth slow in 2016. Investments in R&D, new/refreshed products and cost base reductions over the last few years, together with a weak yen, should support their competitiveness. Robust earnings in the financial year to end-March 2014 (FY14) and FY15 have strengthened their capital structures, providing additional ratings headroom. Fitch expects the three automakers' profitability to remain stable in FY16, supported by a favourable US market, which will offset weakness in Japan, and volatility in Asia and key emerging markets. Cost reductions, a continued weak yen to the US dollar, and solid product pipelines will drive this profitability. Fitch expects all three to maintain solid credit ratios and ample liquidity. ============================= P A P U A N E W G U I N E A ============================= PAPUA NEW GUINEA: S&P Keeps LT B+ Rating, Revises Outlook to Neg. ----------------------------------------------------------------- Standard & Poor's Ratings Services revised the rating outlook on Papua New Guinea (PNG) to negative from stable. At the same time, S&P affirmed the foreign and local currency long-term ratings on PNG at 'B+', and the respective short-term ratings at 'B'. The Transfer and Convertibility (T&C) assessment remains 'BB'. RATIONALE The outlook revision reflects S&P's view that downside risks are emerging even as PNG's new liquefied natural gas (LNG) project reaches full production. The falls in export commodity prices since December 2014 are having a larger negative impact on government revenues than S&P had expected. And while S&P expects the government will cut its expenditure plans to partly offset this, it may prove too challenging for the government to stabilize its debt in line with S&P's projections. Furthermore, over the coming few years, S&P doubts that the economy can continue to sustain the very strong growth witnessed in recent years unless further large foreign-financed resource projects commence in the near term, raising the possibility that PNG's sizable fiscal and external imbalances will be very slow to unwind. The sovereign ratings on PNG reflect structural constraints inherent in a lower middle-income economy dependent on extractive industries and served by weak institutions. In addition, the economy faces external and fiscal imbalances linked to bringing on line a US$19 billion (118% of 2014 GDP) LNG project. With the LNG project now operational, we expect it to contribute to both export receipts and government revenues, enabling the unwinding of PNG's related imbalances in the next few years. Papua New Guinea faces pressing development needs. It had a per capita GDP of US$2,150 in 2014 and is ranked 157 out of 187 countries on the United Nation Development Programme's Human Development Index. Moreover, the prevalence of urban crime in the country deters investment in our view, while governmental institutions are a weakness. In addition, economic data inconsistency is another credit weakness. There are gaps and lags in economic and external data, as well as a lack of transparency in public-sector fiscal affairs. PNG's economy has been undergoing a transformation in recent years, with the construction and now operation of a new LNG plant. The integrated LNG plant has a production capacity of 6.9 million tons per annum and is operated by ExxonMobil PNG Ltd., a subsidiary of ExxonMobil Corp. The project is 33% owned by ExxonMobil, 29% by Oil Search, and 17% by the PNG government. The government also has an indirect interest through its 10.1% equity stake in Oil Search. Although economic growth has slowed to 5.5% - 5.8% in 2013 and 2014 as construction on the facility wound down, S&P notes that it has averaged about 8% in recent years. S&P now expects economic growth to be about 10% in 2015, down sharply from its earlier estimate of close to 20%. This revision partly reflects the earlier boost to growth in 2014, due to the early commencement of LNG production. But it also reflects the likely negative impacts of lower income growth, particularly on government spending. Beyond 2015, S&P expects economic growth to slow sharply, although in the medium term growth may be boosted should further large foreign-financed projects, such as the touted additional LNG projects, go ahead. While the LNG project continues to drive strong economic growth for now, the sheer size of the PNG LNG project, relative to the country's economy, has generated economic imbalances. Between 2010 and 2013, PNG ran current account deficits averaging more than 30% of GDP. S&P estimates a double-digit current account deficit in 2014, with the current account balance shifting to surplus from 2015 as LNG exports accelerate. A combination of external debt and foreign direct investment has financed these deficits. PNG's net external liabilities have risen to more than 490% of current account receipts in 2014 from 50% of current account receipts in 2008. S&P expects this ratio to have peaked and should decline steadily from 2014, in line with the project's expected export performance. The weakness in global energy prices will likely slow the unwinding of these external imbalances, although S&P still expects this process to occur gradually. On the other hand, potential future LNG projects will lead to further external imbalances arising during their construction phases. Aside from higher external imbalances, fiscal imbalances have also risen sharply in recent years, also driven by the LNG project. The government has been lifting spending significantly compared to previous years, to address development priorities and to support economic growth until LNG production reached full capacity. The government had originally planned for fiscal deficits to begin narrowing in 2015 and to gradually reach a balanced position. But the impact of low export prices is weighing on government revenues. The government's mid-year budget update projects that, without corrective measures, the deficit will widen to 9.4% of GDP in 2015, from 6.9% in 2014 and an initial government forecast of 4.4% for 2015. S&P don't expect the deficit to be anywhere near this large, but it has revised its 2015 deficit projection to 5.9% of GDP, from 5.4% previously. S&P's projection reflects the high likelihood of the government restraining spending through the latter part of 2015, and also that the government would likely struggle to spend its full 2015 allocations after spending only 33% of its budget in the first half of the year. S&P considers, though, that there is a further risk of wider deficits, for 2015 as well as for future years, and hence to the outlook for government debt. On S&P's measure, net general government debt is about 30% of GDP. Should the government fail to restrain spending adequately, or should growth in the nominal economy come under even further downward pressure, net general government debt could rise materially above this level. S&P now treats the US$1.2 billion loan used to fund the government's stake in Oil Search as a contingent liability rather than include it in S&P's measure of government debt, with the loan supported by the profitable operations of the LNG project. S&P considers that the public debt stock is subject to exchange rate risk. In 2013, 56% of government debt was denominated in foreign currency. With PNG's domestic banks already holding a large share of their assets in government debt, S&P believes this constrains their ability to fund further government borrowing domestically. Indeed, such financing pressures have been evident since 2014 and appear to have intensified this year. The central bank's foreign exchange, trading band policy remains in place. The IMF assesses PNG's exchange rate to be a crawl-like arrangement. The PNG kina has depreciated substantially against the U.S. dollar in the past couple of years, notwithstanding a sharp spike in early 2014 when the trading band policy was put in place, but the currency remains high against the Australian dollar. S&P expects the declines against the U.S. are modestly offsetting the weakness in export commodity prices that are denominated in U.S. dollars, but the currency's strength against those of other key trading partners will act as a constraint on growth. Managing the economy and public expectations with such a large project underway would be a challenge for any government. Nevertheless, prospects for continuing political stability in the near term will provide PNG with a supportive environment to manage these expectations. Prime Minister Peter O'Neill's People's National Congress Party and his coalition partners currently control a strong majority in Parliament. OUTLOOK The negative outlook reflects S&P's view of a one-in-three chance that it may lower the rating within the next 12 months. This is due to the possibility that the government is unable to constrain its debt levels, and that large fiscal and external imbalances are slow to unwind in an environment of weaker export revenues and modest medium-term economic growth. The outlook could revert to stable if S&P become more confident that anticipated budget measures will successfully allow the government to gradually reduce fiscal imbalances and maintain a low debt level, and that it remains likely that PNG's external position will improve significantly over the next few years. In accordance with S&P's relevant policies and procedures, the Rating Committee was composed of analysts that are qualified to vote in the committee, with sufficient experience to convey the appropriate level of knowledge and understanding of the methodology applicable. At the onset of the committee, the chair confirmed that the information provided to the Rating Committee by the primary analyst had been distributed in a timely manner and was sufficient for Committee members to make an informed decision. After the primary analyst gave opening remarks and explained the recommendation, the Committee discussed key rating factors and critical issues in accordance with the relevant criteria. Qualitative and quantitative risk factors were considered and discussed, looking at track-record and forecasts. The committee agreed that the economic assessment had deteriorated and that the monetary assessment had improved. All other key rating factors were unchanged. The chair ensured every voting member was given the opportunity to articulate his/her opinion. The chair or designee reviewed the draft report to ensure consistency with the Committee decision. The views and the decision of the rating committee are summarized in the above rationale and outlook. The weighting of all rating factors is described in the methodology used in this rating action. RATINGS LIST Ratings Affirmed; CreditWatch/Outlook Action To From Papua New Guinea (Independent State of) Sovereign Credit Rating B+/Neg./B B+/Stable/B Ratings Affirmed Papua New Guinea (Independent State of) Transfer & Convertibility Assessment Local Currency BB ================= S I N G A P O R E ================= GLOBAL A&T: Fitch Affirms 'B-' IDR & Revises Outlook to Negative ---------------------------------------------------------------- Fitch Ratings has affirmed Singapore-based Global A&T Electronics Ltd.'s (GATE) Long-Term Foreign-Currency and Local-Currency Issuer Default Ratings of 'B-'. The Outlook has been revised to Negative from Stable. The Outlook has been revised to Negative because Fitch forecasts that GATE's liquidity will deteriorate during 2015-16 due to lower cash generation and continuing high interest costs. Its 2016 liquidity ratio (ratio of cash + EBITDA to interest + tax + maintenance capex) could fall below 2.0x - the threshold below which Fitch would take a negative rating action. Fitch expects the cash balance of USD214 mil. at end-June 2015 to deplete by USD50 mil.-60 mil. each year as EBITDA could decline to USD150 mil. (2014: USD183 mil.), which would be insufficient to fund its estimates for annual interest payments (USD112.5 mil.), taxes (USD10 mil.) and capex (USD100 mil.). GATE's 2015 capex/revenue will be around 15% before trending down to 12% in 2016 as it invests to ensure its equipment is able to meet customers' requirements. KEY RATING DRIVERS Limited Access to Capital: We believe that GATE cannot draw down on its USD125m revolving credit facility, due to a breach in a debt service incurrence covenant in its secured bond documents. GATE's management is considering options to move cash from its sister company UTAC Manufacturing Services Holdings Pte, monetize its Singapore facility and sell non-core assets to boost liquidity. However, Fitch's rating case will not include these sources of cash until any transactions are substantially completed. GATE's only debt is secured notes of USD1.13 bil. due in 2019. Slowing OSAT Industry: We believe that GATE's 2015 revenue and EBITDA could fall by 10% and 20% respectively, amid a cyclical industry downturn. The integrated circuit (IC) outsourced semiconductor assembly and test (OSAT) industry's 2015-16 revenue will decline due to slowing smartphone and tablet demand growth and declining PC sales. OSAT companies are more exposed to changes in end-device demand as integrated device manufacturers and foundries that use OSAT services also have in-house facilities and they tend to disproportionately cut outsourcing during slowdowns. Bond Dispute to Continue: Fitch believes that the company's on- going dispute with a group of holders of the first tranche of its first-lien bond is likely to remain unresolved in the medium term. The New York Supreme Court decision to reject the bondholders' petition in July 2015 provided temporary relief to the company. However, the bondholders' appeal of the court's decision will continue to expose the company to legal risk. A dispute resolution by payment of damages or through any court judgment that requires significant funds would significantly increase the likelihood of default and lead to a downgrade, which may not be limited to one notch. KEY ASSUMPTIONS Fitch's key assumptions within our rating case for the issuer include: -- Revenue to decline by 10% and 5% in 2015 and 2016 respectively. -- EBITDA to decline by 20% in 2015 and remain flat in 2016. -- Capex/revenue to be around 15% in 2015 and 12% in 2016. -- Cash taxes of USD10m a year. -- No asset sales. RATING SENSITIVITIES Negative: Future developments that may, individually or collectively, lead to the IDRs being downgraded include: -- Any resolution of the dispute with bondholders that leads to significant requirement for funds and further liquidity stretch. -- A fall in the liquidity metric (ratio of cash + EBITDA to interest + tax + maintenance capex (assumed to be USD30 mil.)) to below 1.5x (2015 forecast: 2.2x). Positive: Future developments that may, individually or collectively, lead to Outlook being revised to Stable include: -- Liquidity metric (as defined above) greater than 2.0x on a sustained basis. ==================== S O U T H K O R E A ==================== DAEWOO SHIPBUILDING: Estimated to Hold Additional KRW1 Tril. Loss ----------------------------------------------------------------- Yonhap News Agency reports that Daewoo Shipbuilding & Marine Engineering Co. is estimated to hold an additional KRW1 trillion (US$861 million) in losses from overseas units that have not yet been reflected in its balance sheet, industry sources said on October 11. In the second quarter, the shipyard posted a record KRW2.39 trillion in net deficit, a sharp turnaround from a KRW76 billion profit during the same period a year earlier, as it added the increased costs from a delay in the construction of low-priced ships and offshore facilities to the quarterly financial statement, Yonhap discloses. Operating loss came to KRW3.03 trillion, while sales plummeted 63 percent to KRW1.66 trillion, the report notes. According to Yonhap News, the Company's creditors led by the state-run Korea Development Bank have carried out a thorough inspection of Daewoo Shipbuilding's financial condition since July. "If we count losses from Daewoo Shipbuilding's overseas units, its additional losses will likely surpass 1 trillion won," the source who asked for anonymity due to the sensitivity of the issue told Yonhap. Daewoo Shipbuilding's units in Romania, China and North America are accountable, he added, the report relays. Yonhap says that when the inspection is finished, the creditor banks will announce a restructuring plan later this month to revive the ailing company. Shares of Daewoo Shipbuilding plunged the daily limit of 30 percent on July 15 due to concerns about heavy losses and received a credit downgrade the following day, the report adds. Headquartered in Seoul, South Korea, Daewoo Shipbuilding & Marine Engineering Co. -- http://www.dsme.co.kr/-- is engaged in building ships and offshore structures. Its product portfolio includes commercial ships, such as liquefied natural gas (LNG) carriers, oil tankers, containerships, liquefied petroleum gas (LPG) carriers, pure car carriers; offshore structures, such as FPSO vessels, drilling rigs, drillships and fixed platforms, and naval vessels, including submarines, destroyers, rescue ships and patrol boats. =========== T A I W A N =========== ACER INC: Fitch Expects to Withdraw Ratings Including 'BB-' IDR --------------------------------------------------------------- Fitch Ratings expects to withdraw its ratings of Acer Inc. after a 30-day period as they are no longer considered by Fitch to be relevant to the agency's coverage. Fitch will continue to maintain coverage of Acer prior to withdrawal. Fitch currently rates Acer: Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs): 'BB-'; Outlook Stable National Long-Term Rating: 'BBB(twn)'; Outlook Stable Fitch reserves the right in its sole discretion to withdraw or maintain any rating at any time for any reason it deems sufficient. Fitch believes that investors benefit from increased rating coverage by Fitch and is providing approximately 30 days' notice to the market on the withdrawal. Ratings are subject to analytical review and change up to the time Fitch withdraws the ratings. Fitch's last rating action on the IDRs was on May 4, 2015, when the ratings were affirmed with a Stable Outlook. On Nov. 13, 2014, the IDRs and the National Long-Term Rating were affirmed and all of the Outlooks revised to Stable from Negative. ********* Tuesday's edition of the TCR-AP delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-AP editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Tuesday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-AP constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-AP editor holds some position in the issuers' public debt and equity securities about which we report. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR-AP. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Friday's edition of the TCR-AP features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Asia Pacific is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, and Peter A. Chapman, Editors. Copyright 2015. All rights reserved. ISSN: 1520-9482. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000 or Nina Novak at 202-362-8552. *** End of Transmission ***